Tesla to Start Production in China Next Year, Shanghai Says

Tesla’s first overseas plant will help the electric-car maker avoid some of the risks involved with importing vehicles, such as higher tariffs caused by the trade tensions between China and the U.S. Photo: Bloomberg

(Bloomberg) — Tesla Inc. plans to start partial production in China in the second half of next year, the city of Shanghai said.

The mayor of the city, Ying Yong, visited the Pudong New Area project site and encouraged Tesla to accelerate construction, according to a statement on Shanghai’s official WeChat account Thursday. The plant, dubbed Gigafactory 3, will be the biggest ever foreign-invested manufacturing project in Shanghai. A Tesla representative didn’t have an immediate comment.

The Palo Alto, California-based company has secured more than 200 acres of land for the China factory, which is expected to cost several billion dollars to build. Tesla’s first overseas plant will help the electric-car maker avoid some of the risks involved with importing vehicles, such as higher tariffs caused by the trade tensions between China and the U.S.

The tariffs have had an impact on Tesla’s sales in China, the company said when reporting third-quarter earnings in October.

CEO Elon Musk said at the time that Tesla was striving to start production of its Model 3 vehicle in China next year. The company has also started to advertise for employees for the new facility.